Gay pride in Israel and Palestine

I see that another gay rights march in Jerusalem has been given the go ahead.
Earlier this year, a planned World Pride march in Jerusalem was cancelled, due to massive opposition from both Jewish and Muslim groups.
My feeling was that Jerusalem could be a beacon of multiculturalism, and a World Pride march there could be a positive example for the future. The Intifada Kid begged to differ:

I disagree that holding this in Jerusalem, the Eastern part of which has been occupied by Israel since 1967, should be a cause for celebration. There is a growing movement against this idea, supported by progressive and informed activists for sexual rights based locally and globally. See: boycottworldpride.org.

I can understand how a boycotting of the march would follow from the idea of boycotting Israeli goods and travel to Israel in general, as a means of peaceful protest against the illegal occupation of Palestine. However, I wonder if larger (or, at least different) ideas are at work here, and whether an exception could have been made.
The acceptance of homosexuality is an anathema to all the Abrahamic religions, and the fundamentalists who seek to impose their world-view on others. Surely, therefore, the World Pride March acts in opposition to these people.
So, in reply to the Intifada Kid: Is an acceptance of homosexuality compatible with Zionism? If not, then allowing gays into Jerusalem would radically undermine that Zionism, no? Would World Pride in Jerusalem not be a temporary ‘liberation’ of the city?
(I supposed this argument could be reversed for the other side of the argument. If Islamic fundamentalists were the cause of the impasse, then a gay pride march undermines them, too. Of course, all this depends on an analysis of the conflict in religious terms, which is not a given by any means).
Not that any of this matters, really. As mentioned, the World Pride march in August never went ahead, and was replaced by a protest instead. That, in turn, was drowned out by the nasty conflict in Lebanon.